Ride-sharing app Uber continues to grow popular with users, frustrating Columbia taxi drivers

Uber has been growing in popularity among many smartphone users in Columbia since its launch in July, but the global ride-sharing platform is under fire from many local taxi companies and drivers as everyone waits to see whether the company will have to adhere to city regulations.

Uber argues that it’s not a taxi company that employs drivers. It says it’s an electronic meeting place that allows people to catch a ride with someone who doesn’t mind driving them.

But some of the largest taxi companies in Columbia say that, without a ruling from state or city officials, Uber is operating in an unregulated haze and should be shut down.

“They are illegal,” said Peyton Greene, general manager for Columbia’s Checker Yellow Cab company. “These guys are running around and they don’t have the right insurance, they don’t have permits, and they are not paying business license fees.”

Riders like Uber.

The smartphone app allows users to hail a driver to take them to a destination. Instead of waiting on a corner to hail a cab, Uber users simply create an account through the app by providing a credit card number and an email address. Users open the app to see if there are any available Uber drivers near their location and enter pick-up and drop-off locations.

Once a user signs in, the app calculates an estimated cost of the ride based on an algorithm that calculates a fare based on the day of the week, the time of day, distance of the route and demand for service versus number of drivers signed into the app. So a trip’s cost could be different one day to the next.

Once a driver has been hailed, the amount of the fare, a photo of the driver and description of the driver’s car is shown to the user. That lets the rider know which car to get into, since Uber drivers use their personal vehicles, which aren’t marked.

The fare is taken care of up front, electronically. The transaction is billed to the user’s account, and the money goes to the driver’s account. Nothing, including a tip – there are no tips – is physically exchanged between the user and the driver.

Although Greene said he doesn’t mind competition from the many cab companies in Columbia, he does mind that Uber drivers do not have to jump through all of the hurdles that cab drivers must go through to be permitted to transport their passengers.

“You have to follow all of the rules and regulations,” Greene said. “If you want to operate as a cab driver, you have to do these 25 different things. Everybody agrees that they don’t meet any of those requirements, and that’s what frustrates drivers.”

Catching a ride

The city of Columbia has said Uber is not a recognized driver-for-hire company. Nor does it have a business license to operate in the city limits, officials have warned.

But the city also isn’t cracking down on the service.

In the meantime, the service, now a potentially $40 billion enterprise that’s bigger than some airlines, continues to operate – and expand. Uber on Thursday launched the UberXL platform in Columbia, which allows users to order high-capacity cars if they have six or more riders.

As the app expands, one of the key concerns that taxi companies have is that the ride-sharing company does not follow the city’s regulation on how much they are allowed to charge their passengers per mile.

“The city sets the maximum allowable rates for all cab companies, and they have to follow that,” Greene said. “It’s $2.50 per mile.”

But, Billy Guernier, the general manager for Uber in South Carolina, said it wouldn’t be fair to apply the same rules for Uber that taxi companies must abide by because Uber does not employ the drivers.

“Uber is not a taxi company, so it would be an incorrect categorization of what we are,” Guernier said.

Uber is a technology company that has created an app that offers several products on their ride-sharing platform, Guernier said. Drivers and riders come together without a centralized dispatcher, even though Uber gets a small percentage of the fare.

Guernier said the practice known as “surge pricing” allows for Uber to address the increased demand on weekends, game days and holidays by increasing the rate per mile, which entices more Uber drivers to log onto the app and make money.

“If you are at a restaurant and you want to leave, you can order a car. We can do that cheaper than a taxi because it is an efficient system,” Guernier said. “But, sometimes that price can fluctuate to provide that reliable ride.”

“But, the times we can’t, we are very forthright about the times the rate will fluctuate and the fact that riders have a choice to use the service or not.”

“Uber is the name of the company, and we have different products that we offer, like UberX, which is the local ride sharing product that exists in Columbia,” Guernier said.

Guernier said the company also offers other ride-sharing services such as UberBLACK, which partners with drivers with higher-class vehicles.

Even with the controversy surrounding Uber’s launch in Columbia, Guernier said the company is growing and continuing to receive support from drivers and riders.

“The reaction from those riders and drivers is fantastic,” Guernier said. “People love Uber.”

A driver weighs in

Mark is an Uber driver who did not want to be identified by his real name because it’s unclear if the service is sanctioned by the city, and he doesn’t want to jeopardize his day job.

For him, driving for Uber has been a great experience and a good way to supplement his income as a teacher at a Richland County school.

Mark said he has been an Uber driver since August and, in that time, hasn’t found anything negative about the app or the company.

“It’s just real convenient the way the company is set up,” Mark said. “They make sure your car is inspected and (you have) all the documents you need to be a driver with Uber, like your car insurance and driver’s license. And when those are about to expire, Uber will let you know.”

But Mark said he can understand the push-back Uber has received from taxi cab companies.

“If I was a cabbie and owned a company I would be concerned how (Uber) is going to affect my business,” Mark said. “The way I see it, nobody is trying to take the cab company away. Some people prefer a cab over an Uber – they like a car that identifies itself as a cab. So it’s a matter of choice.”

Still, he said, “If you’re the only game in town, maybe your customer service will slack a little. So friendly competition is good.”

When going to a popular location for a pickup or dropoff, he said, he will not park in a taxi pickup lane.

“If I see there is a loading area where cabs are dropping off their customers, I never try to park in those spaces or take their turf. I move away from those areas because this has been their area for a long time, and I don’t want to interrupt them and their service.”

Waiting on state regulators

In an Aug. 15 news release issued by the city of Columbia’s public relations department, city officials said the ride-sharing model used by Uber and other ride-sharing companies does not comply with regulations found in the city’s code for vehicles for hire.

Taxicab companies that operate in the city are required to be approved by the state Public Service Commission before a business license can be issued, the statement said.

The city said it is waiting for the state to decide how to define Uber.

The PSC meets Jan. 26 to discuss the issue.

Uber filed an application with the PSC in September asking to be recognized in the state as a Class-C business operating as a “transportation network company” that allows people to use their “personal, non-commercially licensed vehicles to provide passenger transportation services in South Carolina for a fee.”

The application goes on to say, “TNC partners (drivers) will not solicit or accept street hails; rather, they will connect with prospective passengers via Uber’s digital platforms.”

One thing the PSC should address, cab drivers say, is insurance for both Uber riders and drivers.

Guernier said Uber has a primary insurance policy that covers up to $1 million per incident from the moment a driver-partner accepts a trip request until the completion of the ride.

Furthermore, Uber’s application to the PSC said, “from the time a TNC Partner logs onto the app, he or she has up to $100,000 of coverage for bodily injury to a passenger. This coverage increases to $1,000,000 once a TNC Partner (driver) accepts a trip request.”

But Dave Sutton, a spokesman for the public safety campaign organization Whosdrivingyou.org, which represents the concerns of taxi and limousine companies, said the coverage that Uber says it offers its drivers is still not the correct insurance that would be provided by a traditional transportation company.

“Any taxi or limousine driver has to possess a specific type of insurance, and that is primary commercial auto liability insurance coverage,” Sutton said.

Sutton said this insurance covers both riders and drivers of traditional taxis and limousines in any kind of scenario. Sutton said Uber tries to blend a contracted driver’s personal insurance with Uber’s own million-dollar policy.

But, if a person’s personal insurance company “finds out that a person is operating as a ride-sharing driver, they will cancel you,” Sutton said. “If you’re an injured pedestrian or passenger, then you have to wait and see if this ride-sharing company will provide coverage.”

Sutton said there are currently 28 states, including South Carolina, whose state insurance departments have issued warnings that ride-sharing insurance policies are unsafe and inadequate for both drivers and riders.

When Uber began operating in a handful of S.C. cities in July, the South Carolina Department of Insurance issued a news release warning riders and drivers of the gaps in insurance coverage.

“Some of these companies may carry commercial liability insurance coverage,” the release said. “However, this coverage may not cover all types of claims. For example, these policies may not provide medical payments coverage, comprehensive, collision, uninsured (UM)/underinsured (UIM).”

Auto insurance companies don’t necessarily want to weigh in on specifics as long as what’s legal is in flux. But an agent at one local State Farm insurance company said that, right now, the agency would not offer insurance to anyone who wanted to drive a personal vehicle for commercial reasons.

Mark said even though he has his own personal insurance policy for his car, he also said Uber will cover him in the event of an accident.

“The way I understand it is, if there is an accident, Uber would cover anything that happened,” Mark said. “I’m sure they have some type of coverage because with that many people driving people around, they would have to have something. Accidents are going to happen.”

Howard Winslow said he has been driving his taxi in Columbia since 1970, and Uber is gutting the taxi industry in the city.

“We are getting screwed any way you look at it,” he said.

Winslow said he is an ambassador of the city for anyone traveling for business or leisure. He attends one of the hospitality classes offered by the city, which is required of all taxi drivers before they can operate a cab in the city limits.

“They are not required to go to the hospitality classes,” Winslow said of Uber drivers. “They can skip all of the regulations, and we have to comply with all the regulations the city puts on us. There is only so much business out there, and it is tough to make a living competing with 400 other taxi drivers alone.”

Mark said he would have no problem paying for any permits the city might require if that is what the city asks of Uber drivers.

In the meantime, Winslow said there’s no telling what cab drivers might do to make money.

“We need to make it a level playing field or do away with regulations and make it the wild west and do it like Uber does,” Winslow said.

This story was originally published December 6, 2014 at 7:00 PM with the headline "Ride-sharing app Uber continues to grow popular with users, frustrating Columbia taxi drivers."